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The commercialisation of space

16 January 17

Many aspects of our lives now depend on the use of outer space, but the legal regime has failed to keep up with technological and commercial developments

by Jennifer Lothian

Space is no longer the preserve of the few. It now represents significant opportunities for many businesses beyond governments and traditional space industries. Over the last few decades, we have seen a dramatic increase in the number of space-based services.

Many of our daily activities – including emails and phone calls, online banking and use of social media platforms such as Facebook – rely on satellites in space. The transportation of goods and services over the globe involves accurate positioning and navigating information obtained from space. Whenever we take a plane, air traffic control is dependent on GPS. And that's before we even consider the fact that routine commercial travel to space (“space tourism”) is set to become a viable commercial reality.

The legal framework

"Space law” is often used to refer to the law governing a myriad of activities in space: such as the use of space-related technologies, international cooperation and weapons in space, property rights and liability for damage caused by objects in space.

Five international legal treaties have been introduced under the auspices of the United Nations. The most important of these is the 1967 Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial bodies (the “Outer Space Treaty”). The other four treaties expand on the Outer Space Treaty, and include the so-called “Liability Convention” (covering damage or loss to human life by a launching state), and “the Registration Convention” (to keep track of objects launched into space).

In addition to the Treaties, many states have their own national laws to govern space activities. In the United Kingdom, the Outer Space Act of 1986 sets out the UK’s obligations under the various international treaties and principles covering the use of space.

Legal black holes

Activities in space characteristically involve the use of ever more sophisticated technologies. The treaties are decades old, and are outdated. Not only have national priorities moved on since the treaties were first created, but the treaties did not anticipate the extent to which private companies are now taking part in space activities. The international legal regime has so far failed to accommodate technical, political and commercial progress.

Nor do current laws deal with unconventional problems which have arisen as a result of space activities. One such problem is the accumulation of space debris (such as rocket bodies and fragments from exploded rocket bodies and collisions). There are many issues which the policy and legal environment is yet to consider.

Article II of the Outer Space Treaty provides that all activities in space must accord with international law. There is however, a major problem: there is no international agreement as to the definition of “space”. Does “space law” trump international law? Until this question is addressed, there is a huge amount of legal uncertainty.

It is not clear which laws will prevail in the event that two states or organisations come into conflict, and with more and more multinational organisations going into space, the question must be considered. What is more, globalisation could mean that we will start to see the emergence of corporations as self-determined nations in themselves. It is crucial that the dilemma of state liability is addressed.

The lack of a recognised international regulatory body leaves a further unanswered question – as space activity inevitably escalates, who will keep the peace?

The new frontier

It is clear that an increasing dialogue is necessary between international lawyers, space lawyers and space agencies. The law and accompanying regulations will most certainly evolve. It will be crucial to adopt harmonised legislation to deal with boundary rights, intellectual property rights, international cooperation, and the use of materials and planetary resources in space.

In the meantime, lawyers need to have an awareness of current legislation and an understanding of the issues. We will need to think carefully about how our corporate clients can pursue their commercial objectives without violating their obligations. For the moment, solutions will most likely be in the form of private law mechanisms such as contract and insurance (we have already seen the advent of space insurance provided by highly specialised insurers).

Currently, there is a lack of standardised contracts, or general terms and conditions in the space sector. This is an issue, coupled with the fact that there is relatively little case law available to legal practitioners. Differing aspects of commercial space ventures will require bespoke solutions. Individual negotiations around issues such as IP, liability and applicable law will be fundamental.

The fact that many commercial activities in space are inextricably linked to a variety of other sectors (such as telecommunications and data protection) heightens the complexity of contracts for such activities. Ultimately however, some solutions will only be found once the issues themselves are defined. Over time, we will surely see the emergence of sector-unique contractual solutions.